PART IIIIncorporation and Continuance (continued)
Formalities of Incorporation (continued)
Marginal note:Subsidiary of foreign bank
24 If a proposed bank would be a subsidiary of a foreign bank, within the meaning of paragraphs (a) to (f) of the definition foreign bank in section 2, and the application for letters patent to incorporate the bank is made by a non-WTO Member foreign bank, letters patent to incorporate the bank may not be issued unless the Minister is satisfied that treatment as favourable for banks to which this Act applies exists or will be provided in the jurisdiction in which the foreign bank principally carries on business, either directly or through a subsidiary.
- 1991, c. 46, s. 24
- 1999, c. 28, s. 10
- 2001, c. 9, s. 46
Marginal note:Application for incorporation
25 (1) An application for letters patent to incorporate a bank setting out the names of the first directors of the bank shall be filed with the Superintendent, together with such other information, material and evidence as the Superintendent may require.
Marginal note:Publishing notice of intent
(2) Before filing an application referred to in subsection (1), the applicant or one of the applicants, as the case may be, shall, at least once a week for a period of four consecutive weeks, publish, in a form satisfactory to the Superintendent, a notice of intention to make the application in the Canada Gazette and in a newspaper in general circulation at or near the place where the head office of the bank is to be situated.
Marginal note:Objections to incorporation
26 (1) Any person who objects to the proposed incorporation of a bank may, within thirty days after the date of the last publication under subsection 25(2) in respect of the proposed bank, submit the objection in writing to the Superintendent.
Marginal note:Minister to be informed
(2) On receipt of an objection under subsection (1), the Superintendent shall inform the Minister of the objection.
Marginal note:Inquiry into objection and report
(3) On receipt of an objection under subsection (1), and if the application for the issuance of the letters patent to which the objection relates has been received, the Superintendent shall, if satisfied that it is necessary and in the public interest to do so, hold or cause to be held a public inquiry into the objection as it relates to the application and, on completion of the inquiry, the Superintendent shall report the findings of the inquiry to the Minister.
Marginal note:Report to be made available
(4) Within thirty days after receiving a report under subsection (3), the Minister shall make the report available to the public.
Marginal note:Rules governing proceedings
(5) Subject to the approval of the Governor in Council, the Superintendent may make rules governing the proceedings at public inquiries held under this section.
Marginal note:Matters for consideration
27 Before issuing letters patent to incorporate a bank, the Minister shall take into account all matters that the Minister considers relevant to the application, including
(a) the nature and sufficiency of the financial resources of the applicant or applicants as a source of continuing financial support for the bank;
(b) the soundness and feasibility of the plans of the applicant or applicants for the future conduct and development of the business of the bank;
(c) the business record and experience of the applicant or applicants;
(d) the character and integrity of the applicant or applicants or, if the applicant or any of the applicants is a body corporate, its reputation for being operated in a manner that is consistent with the standards of good character and integrity;
(e) whether the bank will be operated responsibly by persons with the competence and experience suitable for involvement in the operation of a financial institution;
(f) the impact of any integration of the businesses and operations of the applicant or applicants with those of the bank on the conduct of those businesses and operations;
(g) the opinion of the Superintendent regarding the extent to which the proposed corporate structure of the applicant or applicants and their affiliates may affect the supervision and regulation of the bank, having regard to
(h) if the bank will be a federal credit union, that it will be organized and carry on business on a cooperative basis in accordance with section 12.1; and
(i) the best interests of the financial system in Canada including, if the bank will be a federal credit union, the best interests of the cooperative financial system in Canada.
- 1991, c. 46, s. 27
- 2001, c. 9, s. 47
- 2010, c. 12, s. 1905
Marginal note:Contents of letters patent
Marginal note:Provisions in letters patent
(2) The Minister may set out in the letters patent incorporating a bank any provision not contrary to this Act that the Minister considers advisable in order to take into account the particular circumstances of the proposed bank.
Marginal note:Terms and conditions
(3) The Minister may impose such terms and conditions in respect of the issuance of letters patent incorporating a bank as the Minister considers necessary or appropriate.
- 1991, c. 46, s. 28
- 2005, c. 54, s. 7
- 2010, c. 12, s. 1906
Marginal note:Letters patent of incorporation on application of certain companies
29 (1) If the Minister issues letters patent, under section 22, incorporating a bank on the application of a company to which the Trust and Loan Companies Act or the Insurance Companies Act applies and the paid-in capital of the bank immediately following its incorporation will be not less than five million dollars or any greater amount that the Minister may specify under subsection 46(1), there may, on the request of the company and with the approval of the Minister, be included in the letters patent a provision deeming shares of the bank to be issued, on a share for share basis, to all shareholders of the company in exchange for all the issued and outstanding shares of the company.
Marginal note:Effect of provision
(2) Shares of a bank deemed to be issued pursuant to subsection (1) are subject to the same designation, rights, privileges and restrictions or conditions and, subject to any agreement to the contrary, to the same charges, encumbrances and other restrictions as the shares of the company for which they are exchanged and the shares of the company, on the issuance of the letters patent, become the property of the bank free and clear of any charge, encumbrance or other restriction.
(3) An exchange of shares of a company referred to in subsection (1) pursuant to a provision included in the letters patent incorporating a bank does not deprive a person who was a holder of shares of the company immediately prior to the exchange of any right or privilege with respect to the shares or relieve the person of any liability in respect thereof, but any such right or privilege shall be exercised in accordance with this Act.
Marginal note:Transfer and voting of bank shares
(4) Notwithstanding subsection (3), no share of a bank that is deemed to be issued pursuant to a provision included in the letters patent incorporating a bank may subsequently be transferred or voted contrary to this Act, but any shareholder of a bank who acquired shares of the bank by means of an exchange of shares of a company referred to in subsection (1) pursuant to that provision may, for a period of ten years from the date of issuance of the letters patent, exercise the voting rights attached to the shares without regard to any provisions of this Act, other than subsection (7), that would otherwise prohibit the shareholder from voting the shares.
Marginal note:Shareholder approval
(5) No provision described in subsection (1) may be included in letters patent issued pursuant to section 22 unless the application therefor is accompanied by evidence that the request for such a provision was approved by a vote of at least two thirds of those shareholders of the applicant company entitled to vote thereon, present or represented by proxy and voting at a shareholders’ meeting called to consider the application.
Marginal note:Exchange of share certificates
(6) Where, pursuant to a provision included in the letters patent incorporating a bank, a share exchange is deemed to have taken place, the bank shall, within ninety days after the issuance of the letters patent, make provision for the issue of share certificates representing shares of the bank and for the exchange of those certificates for share certificates representing the shares of the company that were outstanding on the day the letters patent were issued.
Marginal note:Shares of bank may continue to be held
(7) Notwithstanding any other provision of this Act, where letters patent incorporating a bank include a provision described in subsection (1) and, on the date of issuance of the letters patent, another bank and any entities controlled by that other bank held, in the aggregate, more than ten per cent of any class of shares of the applicant company, that other bank may have a significant interest in any class of shares of the bank deemed to be issued pursuant to subsection (1) in exchange for the shares of the company for a period of two years from the date of issuance of the letters patent.
Marginal note:Extension of period
(8) On application of a bank authorized by subsection (7) to hold, directly or through a subsidiary, shares of another bank, the Minister may, by order, extend the period referred to in subsection (7), but the aggregate of such extensions from time to time granted to a bank and of the period referred to in subsection (7) may not, in any case, exceed ten years.
(9) [Repealed, 2001, c. 9, s. 48]
- 1991, c. 46, ss. 29, 573, c. 47, s. 756
- 2001, c. 9, s. 48
- Date modified: